Why Oil May Stay Down For Some Time

As mentioned above, British Petroleum hasn’t been having the best of times in the market as of late, and for the most part, the reason for the company’s blues is the fact that the price of oil has been on lows for some time. Unfortunately, this doesn’t look like it’s going to change any time soon.

You see, for some times, many have had hopes that recent cuts to the production of oil would lead to gains in the price of the commodity, and ultimately provide a boost to the companies that deal in and around the commodity. With OPEC nations and non-OPEC nations alike cutting production of the commodity, you would imagine that supply and demand would quickly balance out. However, there are two big reasons that it hasn’t balanced yet and will likely continue on lows…

• The Supply Glut Is Massive – As we all know, there’s been a massive supply glut in oil for some time. Unfortunately, small cuts to production among some of the world’s largest producers simply isn’t enough to cut into the glut. Not to mention, while we’re seeing some supply cuts around the world, we’re also seeing increased production from some regions. One of the big ones in particular is US shale production. Unfortunately, the supply glut seems to be here to stay for a while.
• Demand – Demand is also a pretty big issue for oil at the moment. You see, with increasing awareness of environmental concerns surrounding oil, we’re seeing more and more use of renewable energy like solar, wind, and water power. This, in combination with the fact that economic conditions around the world are still relatively uncertain, oil demand just doesn’t seem to be able to catch up to supply.

Why This Has Such A Profound Effect On British Petroleum

The bottom line here is that British Petroleum is an oil and gas company. So, when the prices of oil and gas fall, the company simply doesn’t make as much money off of its flagship product. As oil prices continue on lows, British Petroleum is finding it harder and harder to turn a profit. This is leading to larger lending and financing issues that unfortunately seem to have no end.

What Binary Options Traders Should Be Watching For Ahead

Moving forward, British Petroleum is likely to present several incredible opportunities for binary options traders. However, if you want to take advantage of these opportunities, you’re going to need to stay on top of the news. In particular, keep your eyes on what’s going on in the oil industry. Any changes to supply and demand could lead to drastic changes in the price of oil, and therefore, the price of British Petroleum stock. Also, keep a close eye on global economic developments. As economies strengthen, demand for oil could climb. However, if economic conditions remain uncertain, demand is likely to remain on lows.